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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Eight Proposed Beef Packing Plants Would Add 18,000 Head per Day Daily Capacity

06/21/2022

Chick-NewsIn response to the disruption in the supply chain caused by COVID, various investment and producer groups have proposed eight new packing plants with a total capacity of 18,700 head per day.  Of this quantity, Western Legacy Developments to be established in Rapid City, SD. would represent 43 percent of the total with 8,000 head per day.  Other plants range in size from 500 to 3,000 head per day.  In an incisive commentary by Greg Henderson, posted on Farm Journal AG-WEB  he questions the feasibility of establishing new plants given the delays in construction, high capital cost and concerns over the availability of labor.

 

His article noted that the cattle industry needs a number of strategically placed niche plants to serve specific markets.  Henderson noted that for the first week of June, 523,698 head were packed representing a utilization factor of 91 percent.  It is questioned whether an increase in capacity of five percent would lead to higher cattle prices.  If plants break ground in 2022, they will only be functional in 2024 and 2025 coinciding with low availability of steers and heifers given current high cow slaughter.

 

Chick-NewsBeef producers forming associations to establish new packing plants will have to find customers.  This will involve competition with the existing output from the four large packers that collectively supply 85 percent of the market.


 
Copyright © 2022 Simon M. Shane